Nate Expectations

Never Start a Trade War with China

2010-10-20T14:48:00.000-07:00

A favorite quote from The Princess Bride was to, "never get involved in a land war in Asia.” I would like to expand upon that thought and say, “never start a trade war with China.”

The USA has been pestering China for the last few months, with the House of Representatives going so far as to add amendments to the atrocious Smoot-Hawley Act of 1930, which now says that we can slap sanctions on China because they manipulate their currency. (HR 2378) Wake up hypocrites! We manipulate our currency! The politicians are just pissed because China plays the game better. Smoot-Hawley was one of the many reasons that the Great Depression lasted so long… so let’s try it again shall we!

One fun little consequence of messing with the world’s largest exporter is that they may turn around and stop selling you stuff you actually want and need… like rare earth elements. China produces about 95% of the world’s supply of these fun little metals, but they’ve decided to stop selling as much to Western Nations. I wonder what Americans will think if they can’t get their fancy smartphones, IPads, and other technological wonders that cannot be manufactured without the rare earth elements? It’s funny, the House passed a Rare Earth and Critical Material Bill (HR 6160) the same day as the Currency Reform Act mentioned above. Coincidence? I think not. The problem is that we will be moving at the speed of government to get our own mining operations up and going. How well will the technology sector fare in the meantime?

Are you ready to have your wallet mangled in an ill-advised trade war? Are you ready to pay through the nose for technology? Washington doesn’t care! I say get rid of the whole bunch! Especially morons like Rob Bishop and Jim Matheson that voted for the Currency Reform Act. Thank God for Jason Chaffetz, a single ray of hope in a dismal political landscape!

More True than We'd Like to Admit

2010-09-23T09:34:00.000-07:00

http://townhall.com/cartoons/2010/09/23/912deb3f-7419-4400-b802-0cfa9efc492d

Perspective on the National Debt

2010-05-26T14:14:00.000-07:00

The amount of debt that the USA now has is staggering. It seems that all we hear about is the amount of debt that we have (around $13 Trillion) as compared to the GDP (estimated around $14.4 Trillion). That doesn’t sound too horrible, right? But it is misleading! The GDP is NOT the amount of money the government has available to spend. The Federal Government only collects between $2-3 Trillion in tax revenue per year. The estimated DEFICIT (money collected minus money spent) is around $1.5 Trillion!

Let’s put this in perspective, and compare the government to an everyday occurrence. Let’s pretend that you (government) make $100,000 per year and that you’ve taken out a mortgage on a $400,000 house. That doesn’t sound too bad, does it? Payments would only be about $2,150 per month on a 30 year fixed at 5%. That's over half your income, but you decide it's worth it. But wait just a second. In reality, you’re not making mortgage payments. Really, you’re constantly refinancing the interest payment, as well as other foolhardy purchases, back into the mortgage to the tune of an additional $50,000 per year. Oh, and it’s an adjustable rate that is low now, but could go up at any time. Does that sound like a good idea? How long would you keep your house at this rate? Will your debt ever be paid off? Of course not! But this is exactly what our country is doing.

How long is it going to take before we’re no longer able to refinance our country’s debt? When will the general public wake up and realize that someday the ENTIRE federal tax revenue will be spent solely on interest payments on that debt? The hard fact is that our nation is insolvent right now. We are bankrupt! The printing press is the only thing keeping us on life support, but the crash will eventually come. As soon as our creditors lose confidence, the jig is up.

The emperor, in fact, has no clothes!

Your Portion of the Greek Bailout

2010-05-14T09:27:00.000-07:00

How much are you paying to bail out Greece? How charitable do you feel? Do you feel sorry for the Europeans to the tune of $39 Billion? That’s how much we’re on the hook for. That’s only $130 from every man, woman, and child in the USA. That’s like my family of 5 giving a charitable donation of $650 so that foreigners can retire at age 53. Wow, I’m getting all kinds of warm fuzzies inside.

Most people don’t know that American taxpayer dollars are ticketed for going overseas to Europe via our “quota” in the IMF. When the IMF agreed to help Greece, you get to pay your fair share. And, by the way, America’s “fair share” is MUCH larger than anyone else’s “fair share.” Some Republicans are trying to introduce a bill to stop American funds from going to a European bailout, but it probably has a very slim chance of passing. You may wonder why we’re financing the rest of the world when our problems here at home are far from over. You might concede that we’ve lost almost the same amount of money by taking over GM. And don’t even get me started on the money pit that is Freddie and Fannie. But we need to draw a line in the sand. No more bailouts! PERIOD! And especially no American money for foreign bailouts!

As if that weren’t bad enough, the Fed restarted its currency-swap tool, just in time to watch the Euro get flushed down the toilet. That’s right, we are now exchanging dollars for Euros. Don’t worry that the Euro is going to go down in value. Don’t worry that we’ll get left holding the bag, because they will swap back at a later date… assuming they actually have dollars in the future to swap back. Where did we get these dollars to swap with anyway? Aren’t we currently running the largest single year fiscal deficit in history? None of it makes sense. Eventually, the entire worldwide currency system is going to come crashing down. Then what?

Two Things...

2010-05-07T14:23:00.000-07:00

Two things are really starting to bug me.

1) If I hear the phrase “Greek debt contagion” one more time I’m going to lose it. Debt is not contagious! That’s like saying obesity is contagious. Portugal, Italy, Spain, etc. are having problems because they spent too much! Not because Greece is having problems. Nobody’s pointing it out, but the UK’s deficit as a percentage of GDP is actually higher than Greece, and the US isn’t far behind. We should stop looking at Europe and start trying to fix things here at home.

2) Apparently, employers added 224,000 jobs (annualized) but the unemployment rate jumped to 9.9%. Huh? They say more people are actively looking for a job. Maybe, but it sounds more like spin to me. If they said something like we had a “net increase” in jobs, then I would be more prone to believe them. For now, it almost seems as if they have conveniently started reporting only jobs created, without mentioning the number of jobs lost during the same period. Look, we added 224,000 new jobs…aren’t we awesome! but, shhhhh, we also lost 300,000 jobs that we won’t tell you about...

The Socialist View of "Love Thy Neighbor"

2010-04-23T12:39:00.000-07:00

http://www.cagle.com/politicalcartoons/pccartoons/archives/ramirez.asp

Shooting Down Missiles with Lasers Now a Reality

2010-02-12T15:20:00.000-08:00

Back in the 80’s Ronald Reagan started a strategic defense initiative for shooting down incoming ballistic missiles. I also remember playing a board game called Fortress America where the premise of the game was that America was being assaulted from every direction because they were deploying satellites with lasers that could shoot down ballistic missiles from space. Remember, during the cold war one of the things that prevented a nuclear holocaust was the fact that if the USSR shot their missiles at us then we would fire our missiles at them and we would all be destroyed. A strategic missile defense shield would give one side a huge advantage.

Now we have made and successfully tested just such a laser that has destroyed both solid and liquid-fueled missiles while in mid-flight. This is one of the things I don’t mind spending a few $Million tax payer dollars to fund. Read the Missile Defense Agency’s news release here: http://www.mda.mil/news/10news0002.html

More Beranke

2010-01-28T14:49:00.001-08:00

Bernanke was confirmed by the Senate today and is in for another 4 year term. Are you kidding me? Bernanke was at the helm when everything fell apart, and he didn’t even see it coming. Not only that, but he was key part of many of the financial decisions over the past decade that got us in this mess. Now he’s full speed ahead decimating the value of the dollar. Would you retain the captain of a ship after he runs it aground? Didn’t see it coming, huh? Well maybe we should find somebody who knows what the #$%@ he’s doing!

Both senators from Utah voted in the affirmative to approve this yahoo. That’s one more strike against Hatch and Bennett. I will not vote for either. Down with the incumbents! We need more representatives like Jason Chaffetz.

A Christmas Carol will never be the same

2009-12-18T15:20:00.000-08:00

I admit that I spend time reading and thinking about ideas that many may consider out of the ordinary. For example, this afternoon I read a well written defense of Ebenezer Scrooge from Dicken’s beloved story, A Christmas Carol. The author defends Ebenezer as if in a court of law.

What is the bill of particulars with which my client is charged? Pay close attention to Mr. Dickens's allegations. His case comes down to just two points:

1. my client has managed to become very rich, and,

2. he insists on keeping his money for himself.

That's it! That is the essence of his alleged wrongdoing.

I realize that one of the morals of the Dicken’s classic is the seeming transformation of a seemingly unhappy soul to one that is full of joy because of selfless giving. However, there’s a lot more in Dicken’s story that is anti-capitalistic, socialistic, and portrays Cratchitt as the victim. The author then goes on to, yes, attack the Cratchitts (I know, Heaven forbid!). I think that his arguments are well worth considering. For example,

One of the offenses with which my client has been charged was that he had not paid Bob Cratchit a large-enough salary. Cratchit has worked for an allegedly substandard level of pay — whatever that may mean — for my client for many years. Why? Why did he not quit? Why didn't he go to work for some other employer — perhaps one of the politically correct businessmen who periodically show up at Scrooge's office to solicit and browbeat charitable contributions from my client?

And later,

To anyone with even the most rudimentary understanding of economics, two things should be clear: [1] if, as has been alleged, my client is a tight-fisted, selfish man, he surely would not have paid Bob Cratchit a shilling more than his marginal productivity was worth to Scrooge's firm, and [2] if Bob Cratchit was being woefully underpaid by my client, there must have been all kinds of alternative employment available to this man at higher salaries. If Cratchit cannot find more remunerative work, and if my client is paying him the maximum that he is marginally worth to his business, then Cratchit must be worth precisely what my client is paying him!.

And later,

Perhaps there are employers out there prepared to pay him a higher wage than he is receiving from my client. If this is so, then we must ask ourselves: did Bob Cratchit simply lack the ambition to seek higher-paying employment? It would appear so. At no time do we see this man exhibiting any interest in trying to better his and his family's lot.

Not even when the aforementioned businessmen arrive for their annual shakedown of my client, does Cratchit so much as suggest to them: "gentlemen, I have a son who is afflicted with a life-threatening condition, and if you would be so inclined to look upon him as one of the objects of your charitable purposes, I would be greatly appreciative." He can't rise from his self-pitying position long enough to even speak up for Tiny Tim at a time when any responsible and loving parent would have jumped at the opportunity to plead his son's case. If Cratchit is such an unfocused sluggard that he is unable to generate the slightest motivation to speak up on behalf of his son when provided with the opportunity to do so, why should my client suffer the moral opprobrium of a community of readers who presume that he should be more greatly motivated on behalf of Tiny Tim than was Tim's own father?

Anyway, the article is quite lengthy and goes through a long deposition in defense of Mr. Scrooge that I found rather palpable. I recommend reading the entire article, even though you may never view the story in the same way again. As for me, I shall forever now recognize the socialist agenda that A Christmas Carol portrays.

Even Howard Dean wants to scrap the Senate Healthcare Bill

2009-12-16T13:04:00.001-08:00

Healthcare. Will they cram it through anyway? I’ve got to think that when HOWARD DEAN, of all people, says that it’s time to scrap the Senate Bill and start over that it must seriously be a load of crap! Hope and pray that the Senate somehow comes to its senses and starts over.

http://abcnews.go.com/GMA/HealthCare/howard-dean-health-care-bill-bigger-bailout-insurance/story?id=9349392

They're at it again!

2009-12-09T09:58:00.000-08:00

The President is once again telling us that we have to “spend our way out of this recession.” Are these guys high on something? What’s their real agenda? If you’re hurting financially the last thing you should do is go max out all of the credit cards! It just doesn’t make sense.

On top of it all, Obama is getting together with Bank CEO’s so that he can lecture them on why they should be lending more. But at the same time bank regulators are telling the banks that they should ramp up their capital and cut back on lending if things start to look even remotely shaky. Additionally, the Federal Reserve is paying interest on excess reserves. Why should banks lend? It’s a risky market right now and they should be playing things conservatively.

Maybe we should just drop money from helicopters like Bernanke suggested and have it over with quickly.

Obeissance

2009-11-30T11:09:00.000-08:00

http://www.cagle.com/working/091117/ramirez.jpg

Have you noticed Gold Prices lately?

2009-11-16T14:59:00.001-08:00

People look at me funny when I talk about gold. Especially back when I bought a few ounces when it was around $930/oz. Today it's around $1140/oz. Maybe I wasn't so crazy after all.

Why do we trust this guy?

2009-11-16T14:50:00.000-08:00

Bernanke was on stage again today and said the following:

Federal Reserve Chairman Ben Bernanke said Monday the issue of asset market bubbles remains one of the biggest challenges facing policy makers, though he added he does not see anything in the U.S. markets right now that concerns him.

"It's extraordinarily difficult to tell, but it's not obvious to me ... there are any large misalignments currently in the U.S. financial system," Bernanke said.

He was addressing the difficult issue of what policy makers should do when confronted with an asset market that appears to be rising out of step with what fundamentals suggest. As he and other policy makers have said before, Bernanke noted asset bubbles are a "very, very challenging problem" and it is very difficult to determine whether a market has lost its bearings.

Let’s step back in time, shall we…

July 2005

NTERVIEWER: Tell me, what is the worst-case scenario? Sir, we have so many economists coming on our air and saying, "Oh, this is a bubble, and it's going to burst, and this is going to be a real issue for the economy." Some say it could even cause a recession at some point. What is the worst-case scenario, if in fact we were to see prices come down substantially across the country?

BERNANKE: Well, I guess I don't buy your premise. It's a pretty unlikely possibility. We've never had a decline in house prices on a nationwide basis. So what I think is more likely is that house prices will slow, maybe stabilize: might slow consumption spending a bit. I don't think it's going to drive the economy too far from its full employment path, though.

He didn’t see the bubble then. He doesn’t see the bubble now. It may be time to start looking to other people… people who actually saw this last crash coming. Because of extreme government intervention (stimulus, bailouts, etc.) the last "Bubble" was not allowed to deflate. We are setting ourselves up for a much bigger crisis in the future. Get ready.

Posting Again

2009-11-13T15:08:00.001-08:00

I finally have a few minutes to actually sit down and write a little. My days have been hectic at work and busy at home. I will try to post something every once in a while. However, I want to make the disclaimer now that I may or may not have a chance to respond to comments… so please don’t think I’m ignoring your insightful comments… I just have more important things to do :)

It never felt so good to be so bad... at writing

2009-11-13T15:01:00.000-08:00

I always knew I was a winner, but I didn't think it would include my awesome skill for really bad writing. My sentence gained recognition in the Deseret News "Worst Novel Never Written" contest in the Best Romance Gone Wrong category. Maybe I should stick with technical writing :)

BEST ROMANCE GONE WRONG: Her tears were like moon drops dripping from the air-conditioning condenser of my soul, forming a mushy puddle under my Buick. (Nathan Strong)

You can read the entire article at the link below:

http://www.deseretnews.com/article/705339385/Ann-Cannon-Who-knew-so-many-could-write-bad-prose.html?pg=1

FDIC Requesting Bailout Money

2009-09-29T11:15:00.000-07:00

The FDIC has repeatedly said that it does not want a government bailout because it is self-sufficient and funded by fees from the banks themselves. They have repeatedly said that Taxpayers should not be on the hook for bank failures. However, with 95 bank failures so far this year their fund is depleting much faster than anticipated. See Article. They need to raise $45 Billion, and have proposed that banks pre-pay their deposit insurance premiums for the next three years by the end of December. The FDIC suggests that most banks will be able to pay for it out of their reserves. Hey wait a second, the banks primarily put their “bailout” money in their reserves. In effect, the FDIC is pilfering the bailout money. So much for the taxpayer not being burdened with failing banks!

Massachusetts Tyrrany

2009-09-03T09:45:00.000-07:00

“You don’t ever want a crisis to go to waste; it’s an opportunity to do important things that you would otherwise avoid.” – Rahm Emanuel (NY Times)

Are you prepared to surrender your freedom, America? Look what’s going down in Massachusetts.

"Pandemic Response Bill" 2028 was passed by the Massachusetts state Senate on April 28 and is now awaiting approval in the House.

As stated in the bill, upon declaration by the governor that an emergency exists that is considered detrimental to public health or upon declaration of a state of emergency, a local public health authority, with approval of the commissioner, may exercise the following authorities
- to require the owner or occupier of premises to permit entry into and investigation of the premises;
- to close, direct, and compel the evacuation of, or to decontaminate or cause to be decontaminated any building or facility, and to allow the reopening of the building or facility when the danger has ended;
- to decontaminate or cause to be decontaminated, or to destroy any material;
- to restrict or prohibit assemblages of persons;
- to require a health care facility to provide services or the use of its facility, or to transfer the management and supervision of the health care facility to the department or to a local public health authority;
- to procure, take immediate possession from any source, store, or distribute any anti-toxins, serums, vaccines, immunizing agents, antibiotics, and other pharmaceutical agents or medical supplies located within the commonwealth as may be necessary to respond to the emergency;
- to require in-state health care providers to assist in the performance of vaccination, treatment, examination, or testing of any individual as a condition of
licensure, authorization, or the ability to continue to function as a health
care provider in the commonwealth;
- to waive the commonwealth's licensing requirements for health care professionals with a valid license from another state in the United States or whose professional training would otherwise qualify them for an appropriate professional license in the commonwealth;
- to authorize the chief medical examiner to appoint and prescribe the duties of such emergency assistant medical examiners as may be required for the proper performance of the duties of office;
- to collect specimens and perform tests on any animal, living or deceased;
- to exercise authority under sections 95 and 96 of chapter 111;
- to care for any emerging mental health or crisis counseling needs that individuals may exhibit, with the consent of the individuals

Biden thought of the day

2009-09-03T09:41:00.000-07:00

Nearly 200 days into the effort, Biden says it is more effective "than we
had hoped."

"Recovery act dollars are going farther and working harder than we
anticipated," Biden said in excerpts released in advance by his office.

This guy is awesome. Unemployment keeps going up, the commercial real estate market is on the verge of collapse, and other indicators are sketchy at best. Yet Biden is patting himself on the back for doing such a great job. I personally don’t think we’ve seen the worst of it yet. Prepare yourselves.

Look and See the Future of Socialized Medicine

2009-08-21T13:30:00.000-07:00

Don’t believe what the progressives of this country tell you about socialized healthcare! All you have to do is look at the countries that have tried it to see whether it works or not; to see whether Obama’s claims of a glorious future are accurate. Here is a link to an article by Yuri N. Maltsev who worked as an economist on Mikhail Gorbachev's economic reform team before defecting to the United States.

http://mises.org/story/3650

Some interesting paragraphs are included below. If you find these interesting, please read the whole article.

The [Russian] system had many decades to work, but widespread apathy and low quality of work paralyzed the healthcare system. In the depths of the socialist experiment, healthcare institutions in Russia were at least a hundred years behind the average US level. Moreover, the filth, odors, cats roaming the halls, drunken medical personnel, and absence of soap and cleaning supplies added to an overall impression of hopelessness and frustration that paralyzed the system. According to official Russian estimates, 78 percent of all AIDS victims in Russia contracted the virus through dirty needles or HIV-tainted blood in the state-run hospitals.
Irresponsibility, expressed by the popular Russian saying "They pretend they are paying us and we pretend we are working," resulted in appalling quality of service, widespread corruption, and extensive loss of life. My friend, a famous neurosurgeon in today's Russia, received a monthly salary of 150 rubles — one third of the average bus driver's salary.
In order to receive minimal attention by doctors and nursing personnel, patients had to pay bribes. I even witnessed a case of a "nonpaying" patient who died trying to reach a lavatory at the end of the long corridor after brain surgery. Anesthesia was usually "not available" for abortions or minor ear, nose, throat, and skin surgeries. This was used as a means of extortion by unscrupulous medical bureaucrats…
… Even today, according to the [Russian] State Statistics Committee, the average life expectancy for Russian men is less than 59 years — 58 years and 11 months — while that for Russian women is 72 years. The combined figure is 65 years and three months. By comparison, the average life span for men in the United States is 73 years and for women 79 years. In the United States, life expectancy at birth for the total population has reached an all-time American high of 77.5 years, up from 49.2 years just a century ago. The Russian life expectancy at birth is 12 years lower.

I Love Texas!

2009-07-24T11:03:00.000-07:00

AUSTIN — Gov. Rick Perry, raising the specter of a showdown with the Obama administration, suggested Thursday that he would consider invoking states’ rights protections under the 10th Amendment to resist the president’s healthcare plan, which he said would be "disastrous" for Texas.

Read the whole article here.

Letter to my representative

2009-07-23T15:25:00.000-07:00

Here is the letter I wrote to my congressman about Healthcare:

Dear Mr. Matheson,

I am very concerned about the direction our nation is heading with regards to health care. It seems as if the President is trying to ram through a bill that will change our country for the worse. The President keeps reiterating that problem with our current Healthcare system is the cost. The irony is that the bill that has been presented will INCREASE cost, INCREASE unemployment, and DECREASE quality of healthcare. A bill of this magnitude on healthcare will be virtually impossible to undo in the future. Don’t screw it up! The road toward socialized medicine is fundamentally wrong. If there were legislation that only targeted the COST of healthcare then I would be interested in hearing the debate. As it stands now, this bill is a socialistic piece of garbage!

I voted for you in the previous election. Please don’t make me regret that choice. Let me be clear that I will fully support any challenger facing a representative who supports this healthcare atrocity. Don’t vote for it now. Don’t vote for it later. It is fundamentally flawed. We don’t want socialism in America!

Healthcare Not a Right

2009-07-22T11:17:00.000-07:00

I know that the sentiment I am about to express will be unpopular, but it needs to be said regardless: Healthcare is NOT a right… it is a privilege! And it’s one that I work dang hard to provide for my family. Call me an elitist pig if you like. So be it.

The truth is that many people think that health insurance is like a gym membership. They feel that even the smallest of their healthcare needs should be paid for by the insurance company because they pay their monthly dues. But that’s not what insurance is all about. Insurance is “a contract (policy) in which an individual or entity receives financial protection, or reimbursement, against losses from an insurance company, which pools client's risks to make payments more affordable, in exchange for a premium.” Insurance is something you have just in case something bad happens. It should be something you hope you’ll never need. Insurance should be for things that come up unexpectedly (heart attack, appendicitis, accidents, etc.)

The problem is that insurance companies over the years have expanded coverage to include virtually everything from the common cold to flu shots to birth control. If they cover more, you better expect to pay more. Also, we now have awesome new drugs and sweet medical equipment (CT scans, MRI, lasers, etc.) that are quite costly. Since insurance companies are expected to pay for the best possible technology, why wouldn’t you expect to pay for it in your premium? Why is it that doctors insist on doing all kinds of diagnostic tests? Because they don’t want to get sued! Expect to pay for the side-effect of lawsuits (increased testing, higher doctor fees) in your premium. Another thing, look at the time and effort it takes to get your claim paid… does it ever get done right the first time? Does it ever get done in less than 2 – 8 weeks? Expect to see these inefficiency costs in your premium.

Realistically, several things can be done to reduce the cost of healthcare. First, separate healthcare from health insurance. Insurance should be for things that come up unexpectedly. Healthcare should be for routine maintenance items like checkups, physicals, vaccinations, colds, etc (things for which you would see your family doctor). Let’s create a system where we pay the doctor directly for routine services that we receive, or let doctors create healthcare memberships in which you can participate (like a gym membership). This would reduce costs tremendously by cutting out the middleman insurance companies. I wouldn’t be surprised if companies would choose to offer health insurance and healthcare programs as part of their benefits package. In theory, the lower cost of insurance would allow them more money in the budget to consider health maintenance.

Don’t get me wrong on this next point, but people with chronic health problems (like diabetes, heart problems, etc) should NOT be covered by insurance… they should be uninsurable for items relating to their illness or preexisting condition. You can’t buy homeowner’s insurance after your house burns down. That’s a preexisting condition for your house and you’d be insane to insist otherwise. You can’t go off and buy car insurance after you’ve been in an accident and expect them to pay for it. That’s a preexisting condition for your car. Yet so many people think that you should be able to get health insurance that covers a preexisting health condition. How much sense does that make??? It violates the definition of insurance. You can’t insure something that’s already broken. And Hello! Preexisting conditions tax the system and raise premiums for everyone else! I’m not completely heartless, I just think that there should be an independent system, completely separate from insurance and healthcare maintenance, to assist individuals in paying for their chronic conditions. I understand that the financial burden for these conditions is tremendous and requires assistance, but please let’s stop lumping it in with insurance. Rather, let’s start a new program to address this issue directly. I don’t want people to go bankrupt because of an unpreventable medical condition; however, I don’t think that it’s right for the rest of us to pay for it with our insurance premiums. Let’s come up with a new system.

Finally, where does the Federal government come off trying to implement National Healthcare? It’s downright unconstitutional! The tenth amendment states:

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

I defy you to tell where in the constitution it gives the Federal government the power to create a national healthcare system! The power lies with the states, period. There shouldn’t even be a debate in Congress right now because it’s none of their business!

Morally Wrong

2009-07-15T11:00:00.000-07:00

It’s bad enough that society in general promotes sexual promiscuity in our youth, but now Britain’s Health Service has now produced a pamphlet that says that sex is fun.

The National Health Service in the city of Sheffield produced the booklet,
which has a section called "an orgasm a day" that encourages educators to tell
teens about the positive physical and emotional effects of sex and masturbation,
which is described as an easy way for people to explore their bodies and feel
good. Like more traditional sex education guides, it encourages
demonstrations about how to use condoms and other contraceptives.

Some professionals have hailed the new approach as a welcome antidote
to traditional sex education, which they say can be long on biological facts but
short on information about the complexity of human relationships.

The booklet suggests ways in which teachers can encourage sexual
awareness and responsibility while teaching young people that sex is something
that is meant to be enjoyed.

It’s sad and disheartening when these spiritually devastating practices are not only condoned, but encouraged. What kind of world are we leaving for our posterity?

Economy Worse Than You Think It Is

2009-07-14T13:26:00.000-07:00

I find myself with little time to blog these days, but I couldn’t pass up this opportunity to talk about unemployment – currently 9.5%. An interesting article by Mortimer Zuckerman explains a few reasons why the economy is even worse than you think it is. A few of his main points include:

- More companies are asking employees to take unpaid leave.
- No fewer than 1.4 million people wanted or were available for work but were not counted in unemployment numbers.
- The number of workers taking part-time jobs due the slack economy has doubled to about 9 million.
- The average work week for employees in the private sector has dropped to 33 hours.
- The average length of official unemployment has increased to 24.5 weeks.
- Next year state budgets will have depleted their initial rescue dollars. Absent another rescue plan, they will have no choice but to slash spending, raise taxes, or both.

As my wife and I have considered the future, and how to best prepare ourselves financially, it becomes obvious that my employment situation will be the deciding factor. Suddenly job stability has become more important to me than job satisfaction or even compensation. I still believe that high inflation is inevitable, but how many years of depression will we wade through first? Or, will we experience a combination… a kind of stagflation?

Our federal government will keep throwing money at the “economy.” I don’t think there is an end in sight because government spending has not, cannot, and will not fix the problem; but they’ll keep trying. It’s delusional to think that we can spend our way out of this!

Hit by a meteor

2009-06-12T13:39:00.001-07:00

I would love to be this kid in Germany. His name is Gerrit Blank; he’s 14 years old; and he got hit by meteor traveling 30,000 mph. I mean, how many people actually get hit by a meteor? There are only a couple of documented cases in all of history. I would love such a scar!

Obama Apology Tour Continues

2009-06-09T11:39:00.001-07:00

Half a million dollars in debt

2009-05-29T14:43:00.001-07:00

Did you know that your family is half a million dollars in debt and you probably didn’t even know it?

I read an interesting article about our country’s debt obligation. So, not just our current debt but everything that we have committed to pay in the future (includes only those currently in the system for Medicare and Social Security).

The grand total according the article is a whopping $63.8 Trillion of government obligation. That comes out to over $500,000 per household! The President has already conceded that we are out of money, he just didn’t tell you how big the problem is. Just wait until universal healthcare enters the scene. One of these days it’s all going to come tumbling down.

Blogging Again

2009-05-22T12:29:00.000-07:00

It’s been a while since I posted. I am feeling quite a bit better from the surgery, and am now being inundated at work. I guess it’s good to be with a company where there is some job security.

I don’t know where to start. The economy isn’t doing any better. Unemployment is up and even the so-called experts don’t expect this to turn around until mid to late 2010. The president is continuing his Pied Piper dance to the socialistic sea. The people of California would rather lose jobs then increase taxation (good for them!). Spending cuts… what a novel idea!

My favorite article of the day comes from the Telegraph, across the pond in the UK. It's about Biden opening his big mouth yet again... this time about closing Guantanomo.

So will Obama fulfill his vow - announced amid great fanfare in an executive order on day two of his presidency - to close the facility by January 2010? "I think so," Biden responded, according to Newsweek's Holly Bailey.

So perhaps he will. Or perhaps not. We'll see.

Biden continued: "But, look, what the president said is that this is going to be hard. It's like opening Pandora's Box. We don't know what's inside the box."

He also said that "to the best of my knowledge" the number of prisoners "who are a real danger who are not able to returned or tried" has "not been established" by the Obama administration.

So he basically just confirmed his predecessor Dick Cheney's analysis that the decision was taken "with little deliberation, and no plan".

My Surgery

2009-05-01T19:35:00.000-07:00

The surgery seems to have gone well. Last Wednesday I finally had my deviated septum repaired along with some functional endoscopic sinus surgery to clear out my polyp-infested nasal passageways. It's like roto-rooter for your head. The worst part was that I had to breath through my mouth for almost 3 days... boy, your throat just starts to burn after a while!

Between the throat burning, blood dripping down the back of my throat, and difficulty sleeping I thought for sure I had drifted off into a Stephenie Meyer novel. Today, the doctor forcibly extricated the packing that has been holding everything in place. I don't think I cried out, but I'm sure the expression on my face was priceless... it's hard to describe the experience... imagine pulling a banana out of your nose and you might be close. But it was worth it just to be able to breath through my nose again. Swallowing is such a pleasure commonly taken for granted.

China Makes a Brilliant Move

2009-04-17T14:23:00.000-07:00

In the global financial game, China is positioning themselves strongly for the next set of moves. It’s impressive... very impressive! Let me summarize quickly so that you’ll understand what I’m talking about.

- China holds more American debt than any other country.

- China has expressed concerns that our reckless stimulating the economy will ultimately devalue the dollar. This is bad for them because the dollars they’ve invested in will be worth less. Bottom line: they lose money.

- Catch 22. China knows that the dollar will devalue, but if they start divesting their US Treasuries it will cause a panic that will also devalue the Treasuries. Bottom line: they lose money whether they hold onto their treasuries or sell them.

I’ve been thinking that either China would try to sell their Treasuries or try to ride out the storm and hold onto them, hoping for the best. It turns out that they have a much better plan, and actually one that I have been advocating for individuals and families. That is, they are using their US dollars to buy tangible, hard assets that they will need in the future and can be stored easily. See this article published in the UK.

China's State Reserves Bureau (SRB) has instead been buying copper and other industrial metals over recent months on a scale that appears to go beyond the usual rebuilding of stocks for commercial reasons.

Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can.

…The SRB has also been accumulating aluminium, zinc, nickel, and rarer metals such as titanium, indium (thin-film technology), rhodium (catalytic converters) and praseodymium (glass).

While it makes sense for China to take advantage of last year's commodity crash to restock cheaply, there is clearly more behind the move. "They are definitely buying metals to diversify out of US Treasuries and dollar holdings," said Jim Lennon, head of commodities at Macquarie Bank.

John Reade, metals chief at UBS, said Beijing may have a made strategic decision to stockpile metal as an alternative to foreign bonds. "We're very surprised by Chinese demand. They are buying much more copper than they will need this year. If this is strategic, there may be no effective limit on the purchases as China's pockets are deep."

The bottom line: China is using their US dollars to buy commodities that are cheap now and will certainly cost a lot more later after inflation kicks in. Brilliantly played.

When you're losing, just change the rules

2009-04-10T14:16:00.000-07:00

Last week the Financial Accounting Standards Board (FASB) decided to change the rules on how assets can be reported. Basically, they have allowed banks to revalue their so-called “toxic” assets. As reported in the Washington Post on April 3,

“The board that sets U.S. accounting rules voted yesterday to let financial firms report higher values for some troubled assets, a controversial step likely to increase some banks' reported earnings but also heighten suspicions that the companies are concealing problems.”

And what happens yesterday? Wells Fargo comes out with a surprise announcement that they actually made $3 Billion in the first quarter of this year. It’s all smoke and mirrors! Suddenly, their takeover of Wachovia and their troubled assets are a boon (because they can now report that those assets are worth more than fair market value). The stock market saw huge gains yesterday based on optimism from this blatant lie. Many people see right through this charade. The markets will adjust lower in the next few weeks when the general public catches on.

Meanwhile, real damage has been done. How many times have we heard that we have to facilitate these banks in getting rid of their toxic assets? Now, the powers-that-be have allowed these assets to be valued higher. Who’s going to buy toxic assets at inflated prices? We need bargain basement prices and we get premiums!?! How much sense does that make? It confuses everything. Who’s going to invest now? Answer: the taxpayer will eventually foot the ENTIRE bill when the banks get nationalized… just wait and see.

Update 20Apr2009: Bank of America announces SURPRISE 1Q earnings of $4.2 Billion. All the banks will play the same game. Funny to note that their stock dropped 9% when this was announced.

It's a Darwinian thing

2009-04-10T10:29:00.000-07:00

There is hope...

Double Down

2009-04-01T11:51:00.001-07:00

National Debt Clock

As reported by Bloomberg, the financial commitments of the government during this economic crisis are now around $12.8 Trillion. So, in less than a year we have committed to double the size of the National Debt that took over 200 years to accumulate. Awesome! Oh, and unemployment numbers are still going up.

Chinese Kill Weapon

2009-03-31T12:47:00.000-07:00

You may recall a couple of weeks ago when a US Navy Ship, the Impeccable, was harassed by Chinese ships. What was not as well reported was that this is a specialized surveillance ship with sophisticated sonar equipment for monitoring submarines… and it was operating 75 miles away from a Chinese submarine base. No wonder they were a little ticked off.

While the United States Navy is the leviathan of the seas, our main projection of power is our aircraft carrier strike groups. During WWII the dominance of aircraft carriers over more traditional battleships established a new era of naval history. But will these carrier groups become obsolete as new weapons are developed?

Today the US Naval Institute announced that China has developed a special kill weapon to destroy aircraft carriers. The weapon is essentially an anti-ship ballistic missile with an estimated range of 2000 km. At speeds close to Mach 10, these missiles can travel 2000 km in just 12 minutes and they have erratic flight patterns and low radar visibility to elude anti-missile systems. Add this to the fact that China has been deliberately expanding its naval program, including adding a host of new submarines, it is clear that China is preparing for a time when they will want us to stay away. They will be able to put this new kill weapon on their new subs and take out our battleships and aircraft carriers at will. By keeping our carrier groups at bay we will not be able to participate in any conflicts in the region. Good luck Taiwan, Japan, South Korea, etc. You may be on your own.

Fantasia 2009

2009-03-27T11:50:00.000-07:00

Money out of thin air

2009-03-17T11:40:00.000-07:00

In a rare interview with "60 Minutes" that aired last Sunday (March 15, 2009) Federal Reserve Chairman, Ben Bernanke, made some comments that should make you all cringe. Here is an excerpt from CBS News.

Asked if it's tax money the Fed is spending, Bernanke said, "It's not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It's much more akin to printing money than it is to borrowing."
"You've been printing money?" Pelley asked.

"Well, effectively," Bernanke said. "And we need to do that, because our economy is very weak and inflation is very low. When the economy begins to recover, that will be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation."

This is mind-boggling! Need some more money? Here, just let me access your account... I'll just tack a few zeroes on the end there and call it good. Whew, crisis averted.

Good ol' Ben Bernanke is admitting that they create money out of thin air! By magically increasing the amount of money he has effectively made the dollars that you worked hard to earn worth less. This is a blatant inflation tax!!! Where's the outrage???

What's up with gold prices?

2009-03-11T13:06:00.000-07:00

I must admit that something has been bothering me lately. By all accounts, the amount of gold being purchased by consumers like you and me has gone through the roof. Quoting from the American Precious Metals Exchange (APMEX) in their blog entry about the Financial Crash of 2009:

Many Americans (average working people, not just the super-rich) are extremely concerned about the very apparent devaluation of the US dollar. To combat this concern and protect whatever wealth they may have, these citizens are seeking to possess physical gold and silver in volumes not seen in modern history.

In fact, at APMEX, the numbers of orders increased 262% for Gold from 2007 to 2008. Silver orders increased 358% from 2007 to 2008. So far, 2009 appears to be making those increases look paltry by comparison.

The thing that has been bothering me is that the price of gold has not been going way, way up like you would expect it to when demand is super high. Why not? I finally stumbled upon the answer today in this article on MoneyMorning.com. Basically, gold is good to own as a hedge against inflation, not against recession.

As institutions and trade funds are forced to liquidate, many are doing so with their gold. Let me try to explain on a basic level using a simple example. Many funds have rules or guidelines for how the money is invested. For example, a fund may decide to have no more than 15% of its assets invested in gold. So, let’s pretend that a particular fund had $1000 in assets (before the stock market crash) and 15% of that was in gold and the rest in various stocks. They had $150 worth of gold and $850 worth of stock. And then the stock market collapsed and the stock lost 40% of its value and is now only worth $510 (instead of $850), but the gold did not lose any of its value (still $150). The fund now has $660 worth of assets, but now the gold comprises almost 23% of their portfolio. In order to follow their own guidelines, they need to sell enough gold to bring their holdings of gold back down to 15%. This increases the supply of gold in the market and helps keep the price down.

This is what has been happening in the real world. The price of gold isn’t shooting through the roof because it makes sense for investors to sell now in order to liquidate some of their assets, thus keeping the supply of gold in line with demand so the prices are not as affected. This also makes a lot of sense because everyone is afraid that we are entering a deep recession (which we are) and they expect prices to fall, including the price of gold, so sell now while the price is seemingly high. However, things will not happen like they did in the Great Depression. This time we will have an inflationary depression because of the glorious antics of the President and fellow Democrats to print money out the ying yang. Ginormous inflation is all but assured at this point.

Now is the time to get some gold if you can because many experts are predicting the price of gold to reach $1500/oz by the end of the year (it’s around $900/oz now).

FDIC Insolvent?

2009-03-04T11:44:00.000-08:00

Think your savings are stowed away nice and safe in your savings account? You may need to rethink how secure you feel. FDIC Chairman, Sheila Bair, has acknowledged that FDIC may be insolvent this year unless they increase fees for banks and/or receive help from the government (bailout). It might be time to start stuffing 10's and 20's under the mattress.

Free Money

2009-03-03T12:57:00.000-08:00

http://mises.org/story/3347

Great Depression II

2009-02-26T13:14:00.000-08:00

I can’t stand to watch Presidential speeches to Congress because of all the pomp and applause. Might as well watch the academy awards. However, I did read the President’s speech in its entirety, and it made me sad. Sad that our leaders are so blind. Sad that our nation is following like a bunch of sheep… baaaaa. Sad that I’ll be raising my children in such difficult times. I say difficult because I sincerely believe that the economic distress will lead to civil unrest. Our faith in God and reliance on Him will help us through.

You may ask why I am so pessimistic. It’s because my eyes have been opened. We have been living in a booming economic period created by government endorsed expansion of credit. In general, too much money was misallocated to short-term growth that could not be sustained in the long term. It’s like building a wonderful house but discovering half way through that you don’t have enough bricks to finish. What do you have to show for your trouble? No house. Just a pile of useless bricks!

And now the government is insisting that the only way to combat this depression is to throw money at it. The irony is that this approach will only make things worse. Much worse. The same tactic was tried by Hoover and FDR, and we ended up in depression for most of a decade. The Obama plan is much more extravagant. Economic Recovery Requires Capital Accumulation, Not Stimulus. The Great Depression II will be long and deep… are you ready?

Jaguar Inflation

2009-02-20T08:53:00.000-08:00

Here is a great article entitled Jaguar Inflation by Robert Prechter, Jr. He makes an interesting analogy where he asks what would happen if the government decided that it was a necessity for everyone to own a Jaguar (car)? He then compares this to what really happened when the government decided that everybody should have credit. It makes a lot of sense. To quote the final paragraph of his article:

Would lesser availability of consumer credit mean that fewer people would own a house or a car? Quite the opposite. Only the timeline would be different. Initially it would take a few years longer for the same number of people to save enough to own houses and cars — actually own them, not rent them from banks. Prices would be lower because credit would not be competing with money to bid up these goods. And, because banks would not be appropriating so much of people's labor and wealth, the economy as a whole would grow much faster. Eventually, the extent of home and car ownership — actual ownership — would eclipse that in an easy-credit society. Moreover, people would keep their homes and cars because banks would not be foreclosing on them. As a bonus, there would be no devastating across-the-board collapse of the banking system, which, as history has repeatedly demonstrated, is inevitable under a system of central banking and other government-created credit factories.

ARROGANCE and CONTROL

2009-02-18T13:00:00.000-08:00

The two words of the day are ARROGANCE and CONTROL

Mr. Bernanke, you know, almighty commander of the high and supreme Federal Reserve made a speech today to which I hope everyone paid attention. He said:

Some observers have expressed the concern that, by expanding its balance sheet, the Federal Reserve will ultimately stoke inflation.

Uh, yeah. The balance sheet in now near $2Trillion dollars.

At this point, with global economic activity weak and commodity prices at low levels, we see little risk of unacceptably high inflation in the near term; indeed, we expect inflation to be quite low for some time.

Really? You guys haven’t been able to predict the economy so far, why should I think that your prediction of low inflation will hold true?

However, at some point, when credit markets and the economy have begun to recover, the Federal Reserve will have to moderate growth in the money supply and begin to raise the federal funds rate. To reduce policy accommodation, the Fed will have to unwind some of its credit-easing programs and allow its balance sheet to shrink.

OK, now we’re starting to get the truth. When the economy begins to recover you plan to take over and moderate growth in the money supply to avoid rampant inflation. That is, you’re admitting that inflation is a risk, but you’re so ARROGANT that you think you’ll be able to stop it. Guess what? I don’t believe you! Government reacts too slowly. By the time you realize that inflation is growing it will be too late. You won’t be able to undo it at the flip of a switch, and it will increase out of control.

A significant shrinking of the balance sheet can be accomplished relatively quickly, as a substantial portion of the assets that the Federal Reserve holds--including loans to financial institutions, temporary central bank liquidity swaps, and purchases of commercial paper--are short-term in nature and can simply be allowed to run off as the various programs and facilities are scaled back or shut down.

Simply allowed to run off? Government programs and facilities shut down? My experience with government is that once programs are started they are like parasites and are incredibly hard to kill. They don’t just go away.

Importantly, the management of the Federal Reserve's balance sheet and the conduct of monetary policy in the future will be made easier by the recent congressional action to give the Fed the authority to pay interest on bank reserves. Because banks should be unwilling to lend reserves at a rate lower than they can receive from the Fed, the interest rate the Fed pays on bank reserves should help to set a floor on the overnight interest rate. Moreover, other tools are available or can be developed to improve control of the federal funds rate during the exit stage. For example, the Treasury could resume its recent practice of issuing supplementary financing bills and placing the funds with the Federal Reserve; the issuance of these bills effectively drains reserves from the banking system, thereby improving monetary control.

This whole paragraph assumes is saying that the Fed wants CONTROL of all the money. They are going to start paying the banks interest for heaven’s sake! They are doing everything in their power to give incentives to banks to keep their money with the Fed. One of the biggest problems with the bank bailouts to this point is that the banks are not using the money to get credit flowing again. They are just holding onto it until things are a little less risky and interest rates go up so that they can make more money off your tax dollars. The Fed is actually encouraging this behavior.

This is how it’s going to play out. The government will keep trying to “stimulate” the economy by spending more and more money. Please read this article by Frank Shostak to understand why this is such a bad idea. Eventually, the economy will start to improve despite the ludicrous spending. At that point interest rates will start to go up. Remember, this is what Bernanke wants to happen because he thinks ~2% inflation is good for growth. However, when rates start to rise, banks will start removing their funds from the Fed. Also good, right? This is also what Bernanke wants because it will shrink the balance sheet. However, it will be like opening the floodgates and unleashing billions of dollars into the economy in a very short period of time in addition to the Stimulus Package(s). Too much money in the system will make it worth less (i.e. inflation). Bernanke won’t be able to stop it. Nobody will be able to stop it. Inflation wil increase out of control. Bet on it. Thousands of investors are betting on it… the price of gold has risen more than $100/oz in the last 30 days.

Commentary on the Bernanke speech on MarketWatch.

More bad news... Fed doubles Commitment to Fannie Mae and Freddie Mac

Outrage! Democrats Vote without even reading the entire bill

2009-02-13T12:59:00.000-08:00

Do the Democrats have any sense of honesty or integrity??? How in the world can you vote on a bill that you haven’t even read? Sen. Frank Lautenberg (D) doesn’t believe there is a single representative that has read all 1071 pages of the so called stimulus package.

http://cnsnews.com/public/content/article.aspx?RsrcID=43478

It is mind-boggling to me that one of the most important bills of our time is rushed through so fast that the people voting on it don’t even have a chance to read it! What kind of monkey show are we running here?

http://www.youtube.com/watch?v=CvnwOjDjnH4

Hold on to your wallets...

2009-02-10T14:22:00.001-08:00

Are you ready for the roller coaster ride to begin? Congress is in the final stage of passing the most superfluous spending package in history in addition to spending $1-2 trillion more to really bail out the banks this time. What’s even more scary was President Obama’s statement last night that, “… we don't know yet whether we're going to need additional money or how much additional money we'll need until we've seen how successful we are at restoring a sense of confidence in the marketplace that the federal government and the Federal Reserve Bank and the FDIC, working in concert, know what they're doing.”

And what was the reaction today? The DOW dropped 4.62% while the price of gold shot up $20 per ounce on fears of inflation. Contrary to what the president thinks, many Americans are outraged about this stimulus package, but nobody in Congress is listening to their constituents.

Believe it or not, there are many prominent economists who oppose this kind of government spending. One of my favorite new websites is http://www.mises.org/. The Ludwig von Mises institute teaches the Austrian School of economic theory. And guess what… they’re right. They saw this coming. This is the only time I’ve been able to read about economics and it actually made any sense to me. I highly recommend that you check it out.

The government is driving the inflation freight train straight toward us and it is speeding up faster than I imagined. Will you be ready?

Mitt Romney's Opinion on the Economy... similar to mine

2009-01-30T11:22:00.000-08:00

I found these comments from Mitt Romney that he shared today with fellow Republicans. It sounds a lot like my last post. If you don’t trust me, please believe Mr. Romney who also thinks that this nation is on an economic tightrope.

"So why not just spend and borrow with reckless abandon? Because we’re in a very delicate situation that could easily get worse if Washington does the wrong thing. The package which passed the House is a huge increase in the amount of government borrowing. And we’ve borrowed so much already, that if we add too much more debt, or spend foolishly, we could invite an even bigger crisis. We could precipitate a worldwide crisis of confidence in America, leading to a run on the dollar … or hyper-inflation that wipes out family savings and devastates the middle class.

We’re on an economic tightrope. That’s why it is so important to exercise extreme care and good judgment…

…As soon as this economy recovers, we have to regain control over the federal budget, and above all, over entitlement spending. This is more important than most people are willing to admit. I mentioned the economic tightrope before. There is a real danger that with trillions of additional borrowing—from the budget deficit and from the stimulus—that world investors will begin to fear that the dollars won’t be worth much in the future. They may fear hyper-inflation. It is essential that we demonstrate our commitment to maintaining the value of the dollar. That means showing the world that we will put a stop to runaway spending and borrowing."

- Mitt Romney, January 30, 2009

(http://www.boston.com/news/politics/politicalintelligence/2009/01/romney_tries_to_2.html)

The more I hear about "stimulus" packages...

2009-01-29T11:17:00.000-08:00

It has been a while since I posted. The more and more I hear about stimulus packages the more frustrated I become. The American Recovery and Reinvestment bill passed by the house today contains around $275B in tax cuts and about $550B in so-called stimulus. Did you know that there is only $30B allocated for highway and bridge construction projects (pg 6). The items in this bill essentially cover every liberal agenda item from the past few decades including universal healthcare (pg 10). Don’t believe me? Read it for yourself (http://appropriations.house.gov/pdf/PressSummary01-21-09.pdf).

Training Primary Care Providers: $600 million to address shortages and prepare our country for universal healthcare by training primary healthcare providers including doctors, dentists, and nurses as well as helping pay medical school expenses for students who agree to practice in underserved communities through the National Health Service Corps.

This bill will not stimulate anything! It pours a LOT of money into pet projects that may or may not be effective. Our representatives seem to feel like they have a green light to spend, spend, spend. However, their logic is completely flawed. Let me explain myself a little on this one. If $1B is given to construction industry than approximately 30,000+ jobs are created (at least until the money is gone!). However, that money had to come from somewhere. It didn’t just magically poof into existence. Where does it come from? The rest of us taxpayers… who have to pay interest on it as well. The public is duped out of $1B+. Therefore, isn’t it logical to suppose that the public will consequently lose $1B worth of jobs to pay for it? I would argue that the effect is actually worse because jobs across the board are weakened at the expense of a single industry, the construction industry. Does that really sound like a good idea? Maybe it's good if you’re in construction, but the rest of us are screwed!

It’s time now to make some predictions about the future. I would appreciate any comments that you have. Maybe I’m just a little crazy, but it makes sense to me.

1) The American Recovery and Reinvestment bill will produce a short period of stock market gains as Wall Street anticipates some sort of revitalization, but revitalization will not happen.

2) More companies will announce lay offs. Losses will be higher than predicted. The stock market will drop even further than it is now.

3) The cycle will feed on itself (deflation) and lead to a long depression. The government will pass additional “stimulus packages.” Economies around the world will suffer because if we Americans can’t afford to buy their junk then who will?

4) If you think the national debt is bad now, just wait! As deflation sets in, the burden of debt increases. The Fed will have to print money just to stay solvent.

5) After a long period of time (1 – 2 years) the economy will start to turn around for real.

6) If you didn’t think things were bad before, this is where things get really scary. All that fiat money that has been printed / borrowed to “stimulate” the economy will be enter the system all at once because people and companies will have held onto it. People won’t be afraid to spend. They’ll invest in the stock market. Loans will be given. That’s what we want, right? The problem is that increased money supply can lead to only one thing… inflation. Bad inflation!

7) This is where I get off the prediction train because nobody can predict what happens at this point. There are two plausible scenarios that could play out. The more benign of the two is that we experience high (maybe double-digit) inflation until things balance out. The more likely scenario, in my opinion, is that this country will experience hyperinflation because of all the freshly printed money in the system in addition to the national debt. Right now we are past the point of ever being able to repay our debt. For all intents and purposes our nation is bankrupt now. More “stimulus” will just drive us to the brink faster.

8) Hyperinflation can be defined in many ways, but essentially means that the value of the dollar takes a nose-dive, falling essentially to zero. Here’s a practical example. If a loaf of bread costs $3 today, in a hyperinflationary scenario that same loaf of bread might cost $1000 or more because the dollar is worth less. Scary thought, huh? If we really end up like this I hope you have your food storage in order so that you don’t have to spend your life savings just to keep your family fed. A little gold might be nice too because your greenbacks may serve you better as toilet paper than currency.

Thoughts anybody?

Inauguration of the Obama Era

2009-01-20T15:49:00.000-08:00

Unfortunately, I was not able to listen to inaugural address live, but I did get a transcript off the internet. Here are a few of my comments after a quick first review:

OBAMA: “On this day, we come together to proclaim an end to the petty grievances and false promises…”

What he’s really saying is that since the campaigning is over he doesn’t have to act petty anymore or make promises he can’t possibly keep. Now we get the real Barack Hussein Obama.

OBAMA: “We will restore science to its rightful place and wield technology’s wonders to raise health care’s quality and lower its cost.”

Huh? Nothing more than a bunch of buzz words that mean he’ll increase your taxes and give a portion of it to the NSF and NIH. “Technology’s wonders?” What is he talking about?

Here’s a scary one…

OBAMA: “The question we ask today is not whether our government is too big or too small, but whether it works, whether it helps families find jobs at a decent wage, healthcare they can afford, a retirement that is dignified.”

The last time I checked, none of those things are the responsibility of the Federal government! The Constitution outlines the powers and responsibilities of the federal government, and none of those are there! I don't want the government to find me my next job. He’s talking about socialism, plain and simple. This is what we voted for. Hope you guys like living in France because that is Obama’s vision for the USA.

OBAMA: “The nation cannot prosper long when it favors only the prosperous.”

Once again, he’s talking about wealth distribution and guised socialism.

OBAMA: “The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on the ability to extend opportunity to every willing heart – not out of charity, but because it is the surest route to our common good.”

Once again, he wants to extend prosperity to everybody. More socialism. The incentive for working hard is that the guy down the street gets an HDTV. Awesome. In a system like that it’s only a matter of time before everybody becomes “the guy down the street.” Why work hard if you don’t have to?

OBAMA: “With old friends and former foes, we’ll work tirelessly to lessen the nuclear threat and roll back the specter of a warming planet.”

Wow, are nuclear threats and global warming really on the same priority level? I’ll expound my thoughts on the global warming propaganda crusade another time.

OBAMA: “And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to the suffering outside our borders…”

Is he serious? Are we really so indifferent to suffering in other countries? According to the US census bureau we gave more than $39 Billion in foreign aid in 2006. http://www.census.gov/compendia/statab/tables/09s1259.pdf These are your tax dollars at work. Obama seems to think that $39B is “indifferent”; so, how much do we have to give to be on the warm-fuzzy list?

Quote of the Day

2009-01-15T12:02:00.000-08:00

“As the happiness or real good of men consists in right action, and right action cannot be produced without right opinion, it behooves, above all things in this world, to take care that our own opinion of things be according to the nature of things.”

- Benjamin Franklin

Economic House of Cards

2009-01-12T10:55:00.001-08:00

Are you ready for it all to come falling down? The USA economy is nothing more than a house of cards in a drafty room. I know that some of you out there are a little more optimistic about the economy than I am, but is America really “too big to fail”? What I see is an unemployment rate as high as it was in 1945 and a budget deficit of $1.2 trillion dollars in 2009, not including Mr. Obama’s resuscitation plan or the supplemental for the Iraq war, which could easily push the deficit over $2 trillion. I personally think that going into the red for $2T in a single year is a bad omen of things to come. What business could survive with such practices?

The only thing keeping us afloat right now is that foreigners are still buying our debt. What will happen when foreign investors figure out that their investments in America are not as secure as they thought? They’ll pull out. The money will stop flowing into America, although it will certainly keep flowing out. We won’t be able to sustain our rate of spending! That will leave us two options… either cut spending dramatically or increase taxes (most likely through an inflation tax because people are more oblivious that way). I don’t see Obama cutting spending, which leaves only one real foreseeable course of action… the route of inflation. The problem with inflation is that it can get out of hand very quickly and then everybody suffers.

As America goes, so goes the rest of the world. Could it be possible that international experts already know that? Maybe they continue to fund USA debt because if the USA fails then other nations will topple like dominoes? Can you imagine the world chaos that would ensue if the dollar became completely devalued thereby causing other nations’ economies to destabilize as well? It’ll be one for the history books! I think at this point the best-case scenario is a long recession. But I want to plan for the worst-case scenario. What can I do now to prepare for and survive a hyperinflation scenario? A scenario where the entire USA economy comes crashing down, and great shall be the fall thereof. I hate sounding all gloom-and-doom, which is completely out of my nature, but I think it’s a good idea to start preparing just in case.